Metallurgical and beneficiation test work on a large representative composite from Ivana is in progress to provide additional data for an initial Preliminary Economic Assessment (PEA) in 2018

The Ivana deposit remains open for expansion & additional near deposit (or brownfield) exploration resource potential exists in the Ivana area

Current Program

On March 5, 2018 Blue Sky reported the first resource estimate for the Ivana deposit, as shown in Table 1 below. Metallurgical studies and beneficiation studies are underway and will contribute to a PEA for Ivana, which is expected to be completed before the end of 2018.

The arcuate (“C”) shape of the Ivana deposit (see Figure 1 below) is believed to represent a preserved sector of a regional mineralized redox-front, which often include more than one deposit. Therefore, follow-up drilling programs will test for lateral extensions to the currently defined deposit, as well as previously recognized local targets identified by airborne and hand-held radiometric surveys and geological modeling.

The reader is cautioned that mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as Indicated or Measured, and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured category.

Inferred Resources – Base Case at 100 ppm Uranium cut-off grade

Zone

Tonnes
(t)

U
(ppm)

V
(ppm)

U3O8
(ppm)

U3O8
(%)

Contained U3O8
(lb)

Upper

3,200,000

132

131

156

0.016

1,100,000

Lower

20,700,000

335

105

395

0.040

18,000,000

Total

23,900,000

308

109

363

0.036

19,100,000

Notes to Table 1:

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

The Mineral Resources in this estimate were not constrained within a conceptual pit shell owing to the shallow nature of the deposit (0 to 24 m) and blocks above cut-off being reasonably contiguous.

The 100 ppm uranium cutoff grade is based on operative costs of $12/t, a price of $50/lb U3O8, and a process recovery of 90%. A density of 1.84 was applied.

It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

The resource was estimated within distinct zones of elevated uranium concentration occurring within the host sediments. Vanadium is associated with uranium and is estimated within the same zones. There is no indication that Vanadium occurs outside of the elevated uranium zones in the Ivana deposit area in sufficient concentrations to justify developing estimation domains focused on Vanadium.

The mineral resource estimate in Table 1 has been prepared by Bruce M. Davis, FAusIMM, BD Resource Consulting, Inc., and Susan Lomas, P.Geo., Lions Gate Geological Consulting Inc. who are both independent Qualified Persons as set forth by National Instrument 43-101 (“NI 43-101”). A NI 43-101 Technical Report with additional details on the resource estimate and methodology was filed on SEDAR date April 18th, 2018 and is available here.

Location and Access

The Ivana group of properties covers over 118,000 hectares north of Valcheta City in Rio Negro Province. It is the southernmost property along the 140 kilometre NW-SE trend that contains the Ivana deposit and a series of airborne radiometric anomalies which represent future exploration targets. The project has year-round access through a well-maintained gravel road network, in an area of very low population density.The project is in a semi-arid topographical depression, close to 100m below the elevation of Valcheta City, with low rainfall, and within a closed hydrologic system.

Discovery History

Ivana was the third discovery area in the district. In April, 2010, Blue Sky was granted a special airborne geophysics license covering 2.265 million hectares that included all of the prospective areas identified by the Company at the time for uranium in the San Jorge sedimentary basin of Rio Negro Province. The license allowed Blue Sky to fly high-resolution airborne radiometric and magnetic surveys. Blue Sky was given the exclusive right to acquire new exploration licenses on the targets identified in the survey. The Ivana property was acquired to cover several of the anomalies identified by this survey.

A follow-up ground radiometric survey confirmed a >25 kilometre-long anomaly caused by uranium mineralization at or near surface. Field programs included prospecting, geological mapping, sampling/testing of hand pits, auger & shallow rotary drill holes, and a 2,023 metre diamond drill program comprised of 11 holes. Much of this work was funded through a joint venture with the French multi-national uranium company, Orano (formerly Areva).

Starting in 2017, field work at Ivana included two phases of reverse circulation (“RC”) drilling of 427 shallow holes totaling nearly 6,500 metres. A summary of drill results can be found here. The drilling programs resulted in the reporting of the first resource estimate for the project as shown in Table 1 above.

Geology & Mineralization

The Ivana prospect area is underlain by continental epiclastic and pyroclastic rocks of the Upper Oligocene-Middle Miocene Chichinales Formation that were deposited unconformably over the rocks of the North Patagonian Massif, or over a marine sequence of Arroyo Barbudo Formation and a red bed section of Neuquén Group. The uranium-vanadium mineralized horizons are hosted mostly in medium to coarse poorly consolidated sandstones, minor conglomerates, and mudstones of the lower Chichinales Formation; in weathered basement in fractures and secondary porosity; and in the regolith debris at the basement unconformity.

Mineralization in the Ivana deposit is characterized by mineral assemblages representative of both oxide and primary endmembers, occurring together in varying proportions.Oxide mineralization is composed predominately of carnotite, with minor β-coffinite, liebigite, tyuyamunite and variable limonitic iron oxides coating pebbles and sand grains, and disseminated in fine-grained poorly-consolidated sedimentary rocks.Primary style mineralization is composed predominately by coffinite, with minor carnotite, tyuyamunite, liebigite and pyrite hostedwithin carbonaceous gray-colored poorly-consolidated sedimentary rocks.A variant of the primary mineralization is dark brown to black in color from impregnation by vitreous "non-woody" carbonaceous organic matter.

These two types of mineralization are associated with alteration assemblages that suggest at least two processes of uranium deposition were active at Ivana. The deposit has been described as being comprised of an upper and lower zone. The two zones occur together through most of the deposit but there are localized areas where only one zone is present. The upper zone averages 2.7 metres in thickness, with a maximum of 10 metres, while the lower zone has a maximum of 20 metres and has an average thickness of 6.2 metres. In the upper zone uranium oxide minerals are predominant while in the lower zone β-coffinite occurs in greater abundance than the oxide minerals.Plan view of the modelled Ivana deposit can be found here.

Four alteration styles have been recognized at the Ivana Deposit; reduced alteration, reduced carbonaceous alteration, oxidized alteration and hematitic alteration.These alteration types appear to relate to an oxidation-reduction boundary with a complex geometry that is not yet completely understood, but appears to be a controlling factor in the deposition of the primary uranium-vanadium mineralization.

The Ivana uranium-vanadium deposit has some similarities to the surficial uranium deposits of Australia and Namibia in the oxide uranium vanadium mineralization, however, lacks the well-developed calcrete layers generally associated with surficial uranium deposits in semi-arid to arid climates.The primary uranium mineralization at Ivana has considerable similarities to sandstone-hosted uranium deposits, particularly basal-channel sandstone-hosted uranium deposits, and appears to be related to a redox boundary of possible regional extent. Therefore, the Ivana uranium-vanadium deposit should be considered a particular deposit, including characteristics of surficial and sandstone-hosted deposits.That model is maturing as exploration of the deposit progresses.

For a full description of the history, geology, mineralization and exploration programs, please refer to the NI 43-101 Technical Report.